The U.S. Supreme Court ruled on Wednesday that federal courts do not have jurisdiction to hear lawsuits against foreign corporations accused of aiding in human rights abuses abroad.
In one of its biggest human rights cases in years, the justices ruled unanimously that a federal court in New York could not hear claims made by 12 Nigerians who accused Anglo-Dutch oil company Royal Dutch Shell Plc of complicity in a violent crackdown on protesters in Nigeria from 1992 to 1995.
The ruling is a major win for multinational companies, especially those involved in extractive industries, that do business in the developing world and become embroiled in local political controversies.
The ruling is likely to affect other cases, including those involving similar claims against Anglo-Australian mining giant Rio Tinto Plc over its conduct in Papua New Guinea, and against ExxonMobil Corp over its activity in Indonesia.
Esther Kiobel, the named plaintiff in the Royal Dutch case and now a U.S. citizen, brought her lawsuit in 2002 on behalf of victims of the crackdown in Nigeria, including her husband, Barinem, who was executed in 1995.
The Alien Tort Statute, a 1789 U.S. law, had been dormant for nearly two centuries before lawyers began using it in the 1980s to bring international human rights cases in U.S. courts.
Chief Justice John Roberts wrote in the majority opinion that a presumption against extraterritorial application of federal laws applies to the Alien Tort Statute.
The court did not decide the question originally before it in the case: whether corporations can ever be liable under the statute.
Although all nine justices agreed with the outcome, only four agreed with the chief justice's reasoning. Justice Stephen Breyer wrote a separate opinion in which he was joined by three other justices.
Roberts wrote that "nothing in the text of the statute suggests that Congress intended causes of action recognized under it to have extraterritorial reach."
He also said the ruling leaves open some lawsuits under the Alien Tort Statute, including against corporations, as long as there is a sufficient connection with the United States. The claims must have "sufficient force to displace the presumption" against extraterritorial application, he added.
The case is Kiobel v. Royal Dutch Petroleum Co, U.S. Supreme Court, No. 10-1491.